Bank FX: the markup you never see
Banks do not pass the interbank rate to business clients. They embed a margin directly into the exchange rate, no line item, no disclosure.
For business transfers, that markup typically runs 1.5% to 3.5% above mid-market across major UK and North American banks. On £1M in annual conversions that is £15,000 to £35,000 leaving the business silently every year, before wire fees are even counted. [1] The World Bank's Remittance Prices Database puts banks as the most expensive category of provider overall. [2]
An institutional FX OTC desk quotes a disclosed spread against mid-market, typically 0.1% to 0.5% at corporate volumes, agreed before execution.
Retail crypto exchanges: execution quality at corporate size
Retail exchanges advertise a fee. They do not advertise the spread on top, nor the slippage that accumulates when a corporate-sized order works through a shallow order book.
BlockRiver's own order book analysis across major centralised exchanges found worst observed slippage of up to 1.89% on BTC/USDT orders in the $100k–$500k range under normal market conditions, not during a crash, not on obscure pairs. Across multiple major venues and order sizes from $50k upwards, slippage in the 0.65%–1.89% range was observed repeatedly in ordinary conditions over a four-month monitoring period. These figures sit on top of any stated fee. [3]
The structural reason is market depth. Kaiko's exchange ranking data shows that institutional-focused venues maintain significantly deeper order books than retail platforms — built specifically to absorb large orders without price impact. Retail platforms serving mass-market users are not designed for that. [4]
An institutional OTC desk quotes a single price for the full block, off-exchange, with no market impact.
Settlement: where timing becomes a cost
The global OTC FX market averaged $9.6 trillion per day in April 2025. Non-financial customers — the corporates actually converting currency — accounted for just 5% of that turnover, a share that has fallen consistently since 2019. [5] Businesses are a price-taking minority in a market built for institutional players, and settlement terms reflect it.
A standard SWIFT transfer passes through one to three correspondent banks, each adding processing time and potentially deducting fees from the principal. Settlement takes one to five business days. A regulated OTC desk with direct banking infrastructure and named IBANs settles T+0 or T+1 as standard.
KYB: getting onboarded correctly the first time
Retail platforms were built for individuals. Corporate entities with holding structures, multi-jurisdiction ownership, or complex beneficial ownership regularly hit automated rejections with no escalation path.
A regulated financial intermediary treats corporate onboarding as its primary use case. A compliance officer reviews the structure before documents are requested, tells the business exactly what is needed and why, and handles complexity with regulatory expertise rather than an automated filter. Getting this right the first time costs far less than a frozen account mid-conversion.
Audit trail: what finance teams will eventually need
Retail exchange records embed fees into net proceeds, making cost classification and VAT treatment difficult. Execution rates are often unverifiable against an independent benchmark. Institutional trade confirmations specify counterparty, rate, notional, settlement date, and reference number in a format built for accounting workflows and external scrutiny.
BlockRiver AG is a VQF-regulated financial intermediary headquartered in Switzerland, providing institutional OTC execution and multi-currency IBAN services to corporate clients.
Sources
[1] Unicorn Currencies, "B2B FX Markup Report 2026", February 2026. https://unicorncurrencies.com/forcfo/b2b-fx-markup-report-2026/
[2] MTFX Group, "Bank Exchange Rates Explained", 2025. https://www.mtfxgroup.com/post/why-your-bank-exchange-rates-are-worse-than-you-think-and-what-to-do-about-it/
[3] BlockRiver AG, internal order book analysis across major centralised exchanges, 2025.
[4] Kaiko Research, "Crypto Exchange Liquidity Lowdown", June 2024. https://research.kaiko.com/insights/crypto-exchange-liquidity-lowdown
[5] BIS Triennial Central Bank Survey, "OTC Foreign Exchange Turnover in April 2025", September 2025. https://www.bis.org/statistics/rpfx25_fx.htm
